GBP EUR Rallies ahead of EU Inflation Data

The pound has seen a mixed day against the Euro with losses in the morning for the pound before picking up nicely in afternoon trade. Rates for GBP EUR have now broken back over 1.14 taking levels close to the 9 month high seen last Thursday.

With no UK economic data tomorrow eyes look forward to Nationwide House Price data which can at certain times result in market movement. The consensus is that the London property market is cooling and this could start to be reflected in the official data. Any sudden drops could see the pound come under a new wave of pressure although so far the official numbers have proved fairly resilient.

UK manufacturing Purchasing Managers Index data is released on Thursday and should give some clues as the performance of the sector.

EU Consumer Price Index inflation numbers are released on Wednesday alongside December unemployment figures which are likely to create Euro volatility tomorrow.

The ongoing Brexit negotiations are likely to remain the single biggest driver for GBP EUR exchange rates for the rest of 2018. This week continues to tackle the transitional arrangement whilst March should be particularly interesting when the negotiations move on to the future trade deal. This is perhaps the most complex part to deal with and there could be considerable volatility if talks break down. Any suggestion that there could be a no deal scenario could see considerable weakness for the pound.

Clients looking to buy Euros are seeing some of the best levels seen for 9 months but any negative tome could see the pound fall sharply. The no deal scenario is still a possibility and this is likely to remain a hindrance for the price of sterling for the foreseeable future.

To discuss your requirement and how to achieve the best rates of exchange when they happen then please feel free to get in touch with me James at jll@currencies.co.uk

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